The U.S. Attorney for the Northern District of Georgia and the Internal Revenue Service begin a criminal investigation, charging Southern's operating subsidiaries with inappropriate tax accounting for spare parts used in power plants. The companies respond that their tax accounting practices are proper. As the investigation moves forward, the U.S. Attorney looks into other issues, resulting in Georgia Power pleading "no contestâ€ to a misdemeanor charge related to fundraising for a PSC candidate.

The Georgia PSC halts the second phase of Georgia Power's Plant Vogtle-related rate increase, awaiting outcome of the IRS investigation. (The following February, the PSC agrees to allow the next phase to take effect.)

Georgia Power voluntarily shuts down Plant Hatch to fix problems identified in an INPO audit.

Southern Company decides to form a new subsidiary, Southern Nuclear Operating Company, to manage its nuclear operations. While awaiting SEC approval, the nuclear corporate staffs in Alabama and Georgia form project teams.

Southern signs a new long-term power sales contract with Florida Power and expands agreements with JEA and FP&L.

Following a FERC ruling that its off-system sales agreements are valid, the company files a counterclaim against Gulf States Utilities, charging breach of contract. Through 1988, Southern has excluded $149 million from earnings in the event some of the amounts due from Gulf States are not collectible.

In resolving a dispute that dates back to 1971, Alabama Power agrees to sell the Alabama Electric Cooperative 8.16 percent of units 1 and 2 of Plant Miller instead of a portion of Plant Farley. (The deal closes in 1992.)

Southern Company adopts a new incentive pay program to stimulate productivity and launches studies to prepare for anticipated competition and deregulation.

DOE selects four SCS proposals totaling $71 million; three projects will test processes for removing NOx and one will test equipment for reducing SO2 at coal-fired plants.

DOE also awards Southern's research group an $8 million grant to study another advanced coal-cleaning technology at Willsonville called hydrocarbon agglomeration.

NRC requires utilities to develop plans for funding the ultimate decommissioning of power reactors; Alabama Power and Georgia Power establish external trust funds and start setting aside internal reserves earmarked for that purpose.

Public Service of New Hampshire files the first utility bankruptcy in more than 50 years.

Bill Dahlberg becomes president of Georgia Power; Bob Scherer continues as chairman. Allen Franklin is named president of SCS. Also joining Southern's board are Savannah's Gignilliat and McIntosh.